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VA updates fee guidance for IRRRLs

Agency Rule-Making & Guidance Department of Veterans Affairs Refinance Fees Mortgages IRRRL

Agency Rule-Making & Guidance

On June 28, the Department of Veterans Affairs (VA) issued Circular 26-19-17, which provides new funding fee guidance to lenders and servicers concerning Interest Rate Reduction Refinancing Loans (IRRRLs). The new guidance, effective immediately, requires, among other things, that: (i) a Certificate of Eligibility (COE) be obtained for IRRRLs to ensure the funding fee exemption information is up to date at the time of closing; (ii) lenders ask active duty servicemembers if they have a pre-discharge claim pending, and, if so, contact the Regional Loan Center to request assistance in obtaining a proposed or memorandum rating in the event the servicemember is eligible for a funding fee exemption; and (iii) if a lender or servicer is notified by the VA or the veteran of an overpayment of a funding fee, such lender initiate a refund request in the Funding Fee Payment System (FFPS) within three business days.

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